Around €15 million is to be refunded to Bank of Ireland customers after the bank admitted almost 65,000 people who paid off personal loans early were owed money on premiums for their Payment Protection Insurance (PPI)
policies.
The bank said the final bill for refunding customers could hit €15 million after inconsistencies in repayment schemes were uncovered.
BoI said it had issued 470,000 PPI policies as part of 1.5 million personal loans. Customers took out the protection plan as part of personal loans to cover the debt in the event illness or death.
A spokeswoman for the bank said 170,000 car and personal loans had been paid off early but that 65,000 customers were due a refund on their PPI premiums. She said the full extent of the inconsistencies in refunding would not be known until the completion of the investigation.
The issue was uncovered during an industry wide review of the insurance product requested by the Irish Financial Services Regulatory Authority.
Ifsra identified a number of issues relating to the sale of payment protection insurance and asked all banks to submit information on their sales policies and procedures.
A spokeswoman for Bank of Ireland said the company regretted procedures had not been implemented consistently.
BoI said all affected customers would be contacted with and refunded. It is understood the repayment scheme could take a number of months.
Irish Bank Officials' Association general secretary Larry Broderick said: "It is a cause of serious concern that a modern bank could be making errors on such a widespread scale affecting thousands of customers."
He called for a "detailed, independent and totally transparent investigation" to find out how this occurred and why it had not come to light beforehand.
A helpline has been set up by the bank to handle customer queries on 1800 882828.